SWOT Analysis / TOWS Matrix for Khaitan Electricals Ltd (India)
Based on various researches at Oak Spring University , Khaitan Electricals Ltd is operating in a macro-environment that has been destablized by – there is backlash against globalization, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Khaitan Electricals Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Khaitan Electricals Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Khaitan Electricals Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Khaitan Electricals Ltd operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Khaitan Electricals Ltd can be done for the following purposes –
1. Strategic planning of Khaitan Electricals Ltd
2. Improving business portfolio management of Khaitan Electricals Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Khaitan Electricals Ltd
Strengths of Khaitan Electricals Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Khaitan Electricals Ltd are -
Successful track record of launching new products
– Khaitan Electricals Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Khaitan Electricals Ltd has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Khaitan Electricals Ltd has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Khaitan Electricals Ltd is present in almost all the verticals within the Appliance & Tool industry. This has provided Khaitan Electricals Ltd a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy of Khaitan Electricals Ltd comprises – understanding the underlying the factors in the Appliance & Tool industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Khaitan Electricals Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Khaitan Electricals Ltd staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Khaitan Electricals Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Appliance & Tool industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Khaitan Electricals Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Khaitan Electricals Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Khaitan Electricals Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Khaitan Electricals Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Khaitan Electricals Ltd is one of the leading players in the Appliance & Tool industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Khaitan Electricals Ltd in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Appliance & Tool industry
- digital transformation varies from industry to industry. For Khaitan Electricals Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Khaitan Electricals Ltd has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Khaitan Electricals Ltd in the Consumer Cyclical sector have low bargaining power. Khaitan Electricals Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Khaitan Electricals Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Khaitan Electricals Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Khaitan Electricals Ltd are -
Compensation and incentives
– The revenue per employee of Khaitan Electricals Ltd is just above the Appliance & Tool industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Khaitan Electricals Ltd is dominated by functional specialists. It is not different from other players in the Appliance & Tool industry, but Khaitan Electricals Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Khaitan Electricals Ltd to focus more on services in the Appliance & Tool industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Khaitan Electricals Ltd is one of the leading players in the Appliance & Tool industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Appliance & Tool industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Khaitan Electricals Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Appliance & Tool industry over the last five years. Khaitan Electricals Ltd even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Khaitan Electricals Ltd has a high cash cycle compare to other players in the Appliance & Tool industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Appliance & Tool industry
– The stress on hiring functional specialists at Khaitan Electricals Ltd has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on Khaitan Electricals Ltd ‘s star products
– The top 2 products and services of Khaitan Electricals Ltd still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though Khaitan Electricals Ltd has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Khaitan Electricals Ltd, it seems that company is thinking out the frontier risks that can impact Appliance & Tool industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Khaitan Electricals Ltd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Khaitan Electricals Ltd is slow explore the new channels of communication. These new channels of communication can help Khaitan Electricals Ltd to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Khaitan Electricals Ltd products
– To increase the profitability and margins on the products, Khaitan Electricals Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Khaitan Electricals Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Khaitan Electricals Ltd are -
Leveraging digital technologies
– Khaitan Electricals Ltd can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Khaitan Electricals Ltd can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Appliance & Tool industry.
Learning at scale
– Online learning technologies has now opened space for Khaitan Electricals Ltd to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Khaitan Electricals Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Khaitan Electricals Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Khaitan Electricals Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Khaitan Electricals Ltd can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Khaitan Electricals Ltd can develop new processes and procedures in Appliance & Tool industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Khaitan Electricals Ltd to increase its market reach. Khaitan Electricals Ltd will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Khaitan Electricals Ltd can improve the customer journey of consumers in the Appliance & Tool industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Khaitan Electricals Ltd can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Khaitan Electricals Ltd can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Khaitan Electricals Ltd has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help Khaitan Electricals Ltd to build a more holistic ecosystem for Khaitan Electricals Ltd products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Khaitan Electricals Ltd is facing challenges because of the dominance of functional experts in the organization. Khaitan Electricals Ltd can utilize new technology in the field of Appliance & Tool industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Khaitan Electricals Ltd can use these opportunities to build new business models that can help the communities that Khaitan Electricals Ltd operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.
Manufacturing automation
– Khaitan Electricals Ltd can use the latest technology developments to improve its manufacturing and designing process in Appliance & Tool sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Khaitan Electricals Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Khaitan Electricals Ltd are -
Environmental challenges
– Khaitan Electricals Ltd needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Khaitan Electricals Ltd can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Khaitan Electricals Ltd can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Khaitan Electricals Ltd prominent markets.
Regulatory challenges
– Khaitan Electricals Ltd needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Appliance & Tool industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Khaitan Electricals Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Appliance & Tool sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents Khaitan Electricals Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.
Increasing wage structure of Khaitan Electricals Ltd
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Khaitan Electricals Ltd.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Khaitan Electricals Ltd needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Khaitan Electricals Ltd can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Appliance & Tool industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Khaitan Electricals Ltd.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Khaitan Electricals Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Khaitan Electricals Ltd will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Khaitan Electricals Ltd high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Khaitan Electricals Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Khaitan Electricals Ltd needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Khaitan Electricals Ltd is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Khaitan Electricals Ltd is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Khaitan Electricals Ltd to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Khaitan Electricals Ltd needs to make to build a sustainable competitive advantage.
